The Treasury Department announced Thursday that its efforts in taking a technology and data-driven approach to fraud and improper payment prevention saved more than $4 billion in fiscal year (FY) 2023, including recovering $1 billion by leveraging AI.
“Treasury takes seriously our responsibility to serve as effective stewards of taxpayer money. Helping ensure that agencies pay the right person, in the right amount, at the right time is central to our efforts,” said Deputy Secretary of the Treasury Wally Adeyemo.
“We’ve made significant progress during the past year in preventing over $4 billion in fraudulent and improper payments,” Adeyemo added. “We will continue to partner with others in the federal government to equip them with the necessary tools, data, and expertise they need to stop improper payments and fraud.”
According to the press release, Treasury began using enhanced processes, including AI, to deal with increased fraud and improper payments since the pandemic.
While fraud includes willful misrepresentation, improper payments include those that shouldn’t have been made or were made in the wrong amount. That can be the fault of the government, as opposed to the person receiving a payment or benefit.
The Government Accountability Office (GAO) estimated that the Federal government made just under $236 billion in improper payments in FY2023.
According to the Treasury Department, in FY2023, it expanded its risk-based screening resulting in $500 million in prevention; identified and prioritized high-risk transactions resulting in $2.5 billion in prevention; expedited the identification of Treasury check fraud with AI resulting in $1 billion in recovery; and implemented efficiencies in payment processing schedule resulting in $180 million in prevention.
With the use of emerging technologies, the Treasury Department said it was able to recover and prevent $652.7 million more in FY2023.
As the Federal government’s central disbursing agency, Treasury securely disburses approximately 1.4 billion payments valued at over $6.9 trillion dollars annually.
“At a time when losses from fraud in the financial sector continue to rise every year, with online payment fraud expected to cumulatively surpass $362 billion by 2028, Treasury is uniquely positioned to support federal programs proactively mitigate the risk of financial fraud by leveraging data and emerging technologies,” the department said.
